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dc.contributor.authorŞen, A.en_US
dc.date.accessioned2016-02-08T09:44:26Z
dc.date.available2016-02-08T09:44:26Z
dc.date.issued2013en_US
dc.identifier.issn0305-0483
dc.identifier.urihttp://hdl.handle.net/11693/21300
dc.description.abstractWe consider the problem of selling a fixed capacity or inventory of items over a finite selling period. Earlier research has shown that using a properly set fixed price during the selling period is asymptotically optimal as the demand potential and capacity grow large and that dynamic pricing has only a secondary effect on revenues. However, additional revenue improvements through dynamic pricing can be important in practice and need to be further explored. We suggest two simple dynamic heuristics that continuously update prices based on remaining inventory and time in the selling period. The first heuristic is based on approximating the optimal expected revenue function and the second heuristic is based on the solution of the deterministic version of the problem. We show through a numerical study that the revenue impact of using these dynamic pricing heuristics rather than fixed pricing may be substantial. In particular, the first heuristic has a consistent and remarkable performance leading to at most 0.2% gap compared to optimal dynamic pricing. We also show that the benefits of these dynamic pricing heuristics persist under a periodic setting. This is especially true for the first heuristic for which the performance is monotone in the frequency of price changes. We conclude that dynamic pricing should be considered as a more favorable option in practice.en_US
dc.language.isoEnglishen_US
dc.source.titleOmegaen_US
dc.relation.isversionofhttp://dx.doi.org/10.1016/j.omega.2012.08.001en_US
dc.subjectDynamic pricingen_US
dc.subjectHeuristicsen_US
dc.subjectRevenue managementen_US
dc.subjectYield managementen_US
dc.titleA comparison of fixed and dynamic pricing policies in revenue managementen_US
dc.typeArticleen_US
dc.departmentDepartment of Industrial Engineeringen_US
dc.citation.spage586en_US
dc.citation.epage597en_US
dc.citation.volumeNumber41en_US
dc.citation.issueNumber3en_US
dc.identifier.doi10.1016/j.omega.2012.08.001en_US
dc.identifier.eissn1873-5274


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